Conference 7.286::digital

	Latest rumors (pick one):

	DEC is being bought out by Donald Trump.  Immediate shuttle
	service from Maynard to the big building in New York.  
	Fancy dinners and DECservice awards in Aspen on the horizon.

	DEC is being bought out by a fabulously rich Arab sheikh.
	Starting October 1, camel use approved by Corporate Travel,
	dress codes in Digital facilities, all buildings' hallways
	lined with marble, plumbing fixtures solid gold.

	DEC is being bought out by the former Communist Party of
	the Soviet Union.  They've got all the bucks over there, 
	anyway, and could use a good top-heavy company to run into
	the ground.  VAX line cancelled.  All cpus sold to be
	PDP 11/34s - RT11 becomes the flagship operating system -
	Xmodem the networking protocol of choice.

	DEC is being bought by MicroSoft.  Bill Gates had some
	extra pocket change, and what the heck, he was looking for
	a tax write off.  MS-DOS booted on VAX 9000 within 30 days.
	MicroSoft Windows soon after.  Software bundled with 9000
	includes DOS, Windows, Lotus and Pac-Man.

	DEC is being bought by the City of New York.  Employees work
	3 hours/day, get immediate 75% pay raises, produce nothing.
	Existing stock of VAX 9000s put to use calculating employee
	pensions, benefits, vacations, holidays.

	DEC is being bought by a mysterious South American figure.
	Nobody knows what he does, but he has a fleet of fast,
	twin-engine planes with bug splats all over the front of
	them ( and no seats ).  DEC facilities are re-configured
	to be 1/2 computer stuff....1/2 warehouse space.

    The rumor has been going around this area all day . I did not put to
    much stock in it untill I read  .1 attempt to belittle it . Beside the
    takeover it has been said that K.O. will be retiring in oct . Also
    there is a rumor that 17,000 will be let go .

    The rumor about Mitsubishi, KO leaving Oct 7, and 17000 layoff figure
    has now hit Los Angeles. I just got a call from a friend wanting to
    know if I heard anything.
    
    What a network!
    
    
    Dave
    

    
    A fellow employee just showed me an article in today's Marlboro
    Enterprise that has both companies denying these rumors.
    

     
    
      Regarding .4, both companies denying; a sure sign it's true!!
    
      I have also heard this rumor. See notes in 1604.
    
                    
                                   Phil...

    Is this a joke, or did someone REALLY see this on TV?
    
    Tammi
    Washington, DC
    

    I've had CNN on all day, and haven't heard this yet. Perhaps it was on
    CNN *Headline News*. ?
    
    Scooter

    Even if someone saw it on TV, that is no evidence it is true.  See John
    Quinn's comments on SEC or FTC controls over takeovers.  

    
    
        I guess I'll revert to something my Dad told me years ago when I
    was about 7.
    
            "Believe none of what you hear, and half of what you see"!
    
        But I got to admit, following this stuff is fun.
    
    
    
                                       Phil...

    If this rumor were true, our stock would have closed around 95. Our
    stock closed near 56, so no offers yet.
    
    Jessie

 -----       Rumors of Takeover Boost Digital's      
|C I S|      Stock                         
 -----  
Author: Edelman, Lawrence;             Source   : Boston Globe
                                       Type     : Newspaper
                                       Date     : 01-MAR-90
                                       Report ID: 3012906



Section  Topic 
-------  -----------------------------------------------------------------------

  Intro       Summary of Report (Supplied by CIS Editor)
   1          Speculation - Mitsubishi Eyes Digital




























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     |     -  Internal use only in accordance with vendor agreements | 
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                                  Boston Globe

                                      ( 1 )




 -----       Rumors of Takeover Boost Digital's             | 01-MAR-90
|C I S|      Stock                                          | Boston Globe
 -----       


Intro: Summary of Report (Supplied by CIS Editor)


Digital Equipment Corp.'s stock price soared more than 8 percent in late
trading yesterday as unsubstantiated rumors swirled that a Japanese company
had bought stake in Digital and might be eyeing a takeover attempt.  Digital,
periodically the target of takeover speculation, said it was unaware of anyone
accumulating its stock, which jumped 6 to 78 in consolidated trading on the
New York Stock Exchange.  The sharp run up apparently was triggered by
speculation among Wall Street traders that Mitsubishi Electric Corp. of Japan
had notified the Securities and Exchange Commission that it had acquired 5
percent or more of Digital's stock.  Mark Steinkrauss, Digital's director of
investor relations, said that the company had not received notice of such a
filing by anyone.



Section: 1 Speculation - Mitsubishi Eyes Digital

Digital Equipment Corp.'s stock price soared more than 8 percent in late
trading yesterday as unsubstantiated rumors swirled that a Japanese company
had bought a stake in the Maynard computer maker and might be eyeing a
takeover attempt.

Digital, periodically the target of take-over speculation, said it was unaware
of anyone accumulating its stock, which jumped 6 to 78 in consolidated trading
on the New York Stock Exchange on heavy volume of 1.1 million shares.

The sharp run-up apparently was triggered by speculation among Wall Street
traders that Mitsubishi Electric Corp. of Japan had notified the Securities
and Exchange Commission that it had acquired 5 percent or more of Digital
stock.


Mark Steinkrauss, Digital's director of investor relations, said the company
had not received notice of such a filing by anyone. However, Sanford C.
Bernstein & Co., a New York investment firm, did inform the SEC last week that
its Digital holdings for clients had reached 6.2 million shares, or 5.2
percent of the shares outstanding.  The firm's filing said the clients had
acquired Digital stock for investment purposes only, Steinkrauss said.

"It's not unusual for the rumor mill to pick up when a stock trades close to
or at a two-year low," said Steinkrauss.

Analysts said it was unlikely Mitsubishi was interested in Digital.

"It's all baloney," said Michael Geran, who follows the computer industry for
Nikko Securities Co. International, a unit of Japan's giant Nikko securities

                                  Boston Globe

                                      ( 2 )




 -----       Rumors of Takeover Boost Digital's             | 01-MAR-90
|C I S|      Stock                                          | Boston Globe
 -----       

group.  "Mitsubishi isn't in this business," he said.


Digital's stock has been hammered in recent months by poor earnings and a
slumping computer market.  Last week Digital held out the possibility that it
would post its first quarterly loss in 32-year history.

It's price fell to 69 1/2 earlier this week, a two-year low, Steinkrauss said.
That is just $1 above Digital's per-share book value, or the value of its
assets minus liabilities, he said.

This is not the first time Digital has been named as a takeover candidate.  In
past years American Telephone & Telegraph Co., NCR Corp. and Unisys Corp. have
all be rumored to be studying the company.
(c)  Boston Globe



































                                  Boston Globe

                                      ( 3 )


    re: 1611.9

    I don't know who John Quinn is, but I do know the role of the SEC and
    FTC in mergers and acquisitions.

    The role of the SEC is to determine that security laws are complied
    with and that shareholders and the public are treated fairly.

    The role of the FTC is to determine that the anti-trust laws are
    complied with.  Since Mitsubishi is not a significant player in the US
    computer industry, this is a trivial test.

    re: the rumor

    Wall Street either didn't hear this rumor, or if it did, then it did
    not give it much credibility.

    IBM stock improved as well, does Mitsubitch has thaaaat deep pockets ?

    	If it's on CNN, it means that somebody judged the "news" as
    sufficiently entertaining. That's all.

    				w

    ref .1
>	DEC is being bought out by a fabulously rich Arab sheikh.
>	Starting October 1, camel use approved by Corporate Travel,

Actually believe it or not, some Arabs have used cars too. (they also
use Airplanes to travel, isn't that unbelievable?)

you'r sounding another stereotypes about more than 150 millions
peoples, from what CNN cares to tell you about them in its 5 seconds news 
clips, without you thinking about what your are repeating.

but considering where you got your knowledge about Arabs, i cant really 
blame you, only feel sorry for your lack of understanding in this area.

/Nasser

    

    Re:  CNN reports
    
    But, has anyone here actually heard or seen this report?  Or are we
    just passing along a rumor along the lines "I heard that someone heard
    that ..... CNN said ....."?
    
    Steve

         The community relations manager at CXO has stated that the rumor
    is false; that Ken Olsen is not retiring at this time; that CNN did NOT
    run the story as alleged; that DIGITAL is not currently being sold.
    
                                        GB

    
    
    	Rumors on Wall Street often move the under-lying stock up or down
    	just only on the chance something may happen. Wall Street is often
    	wrong about the rumor ..... but none the less forces the stock
    	movement .......
    
    
    	Believe me IF any of the rumors here are true the stock market
    	would be crazy with activity ...... since the market has seen
    	fit not to react ...... I'll just go back to work ..... just
    	like the rest of us should. DEC is actually trading with less
    	volume today than normal...... and no big moves either way.
    

    re: .15   ABBASSI, please think before you respond...
    
    
    pssssstt... Nasser -- it's a JOKE!!  Get it??  a joke??  Rumours are
     cynically humorous by nature.
    
    <set mode/serious> try not to lose the ability to laugh at oneself. It
    makes so many things more tolerable.
    
    regards

    
    KO addressed the VMS Partners this morning in Nashua and based on the
    sorts of things he was asking the partners to do/participate in/assist
    him with, he clearly left the impression that he will be around for
    some time to come.
    
    Secondly he told a story about some very negative things that occur to
    a company that is aquired/merged by another company despite how good an
    opportunity it may have seemed to the acquired company prior to the
    acquisition. Again, he clearly left the impression that he thought that
    being aquired/bought/merged with another company is NOT a good thing.
    
    -Joe
    
                                                                         

    Re: -1
    >some very negative things that happen to companies that are
    acquired...
    
    I guess quite a few of us have personal experience of the above
    statement which transformed into a wish to work for a stable
    company such as this.
    
    Calvin

    
    The takeover rumor is ridiculous. Such companies as AT&T and Mitsubishi 
    would clamp onto companies like Wang, DG or Prime before they even 
    touched us. 
    
    If you believed it or even got slightly nervous about the rumors that
    have been floating around, you are either gullible or paranoid, or both.
    
    /prc

                   -< More knowledge will help >-
    Re:.22
    
    I feel most people believe the takeover rumors out of ignorance.
    I must admit I am one of them. 
    
    Can someone shed more light on exactly how takeovers are made and
    if there is any prior indications of an impending takeover or the
    criteria of companies that are viable for takeovers?
    
    Thanks
    Atul

    
     Re: 17,000 to be let go by end of year .
    
       It has been duly noted that the process of laying off 17,000
    deckies has begun . This morning a note was sent asking for volunteers
    to begin a carol group for the holiday season . It has been learned
    that their main carol will be "" I'll be home for Christmas "". Also
    CNN will give this news some air time in the near future .

re 1611.*,1614.*,1615.*   (a lot of notes on the same subject)
..........................................................................
While to the best of "MY" knowledge the rumors are not true, a takeover
is more possible now than it ever was or ever will be.

Consider the following facts (and assumptions)

1.    The "DEC CULTURE" is dead. For that matter the freedom that the
	entire industry knew has disappeared along with a 30% growth rate.
	Instead of morning the death we should accept that change will occur.

2.    K.O. is 65 and has been been at the helm for 34 years.
	How much more could any employee ask of him. It will take at least
	several years to turn the company around. In addition K.O. has
	had to do some of the things he said he never wanted to do (ie layoffs).
 
3.    We have lost (at least) one seventh of our executives in the past few
	weeks. Many of them well known major players. If Ken were to retire, 
	or get ill, who would succeed him? Who could.

4.    Digital is bleeding but not much yet! 
	We have lost some sales and prestige but we are a still a major
	force in the industry. In order to turn around we need strong 
	leadership more than we need solutions such as DELTA. If we don't 
	turn around we will be less attractive later. Remember TAKEOVER FIRMS,
	like sharks, go after pray that is wounded but still alive. By the
	way I once worked for a company that took over other compines. DEC's
	current state is what they would always look for as ideal.

5.    Our stock is as low as it has ever been even though our balance sheet
	including cash is as strong as ever. The stock is not only below
	"BOOK" value but (depending on who you listen to) is as much as 
	$30/share below "BREAKUP" value. 

6.    There are at least 100 companies world wide who could TODAY takeover
	in a non-hostile bid. In a friendly take over, if there was not a
	direct stock swap, a suitor ("XYZ") would only need to purchase 51% 
	of the shares or about 61 million shares. If the average price was 
	$99/share the firm would need only 2 billion in cash and 4 billion in 
	short term loans from the bank. After Digital becomes a division of XYZ
	they issue additional stock of XYZ to purchase the remaining shares and
	retire the loans. There are several hundred companies worldwide, 
	including Digital, that has access to that much cash. Four years ago
	when the stock was in the $180 range before a takeover bid and the 
	market value was over $20 billion, the only way even AT&T could even 
	take us over was with a stock swap.
	
7.    If there was a hostile take over DEC would lose, even if we were not
	taken over. The cost of fighting would be enormous and would result
	in a smaller DEC. Just look at the large corporations that have won
	a fight against a hostile takeover. Those who have not embraced a
	WHITE KNIGHT have had massive layoffs to cover the cost of the fight.
	
	Question: Why would someone attempt a hostile takeover only to lose. 
	Answer:   GREENMAIL, hundreds of millions of potential profit in a
			stock "Buy back" 


  Given these facts if you were K.O. would you not consider a White Knight that
  might offer to respect what you built, (ie minimize downsizing, preserve
  or even improve the level of service to the customer, continue the level of
  research ...). If you didn't consider this, with out enough leadership,
  you could lose it all in a couple of years. 

  It would be very nice if DEC remained the way it was ten years ago, but it
  couldn't and we can't bring it back. Ken, among others, have done a lot for
  the company, its employees, and customers over the past 3 decades. We are
  not K.O. and can only do our best in our jobs and hope he will keep us in
  mind in his decisions. 

    
    
    	re .22
    
    	I don't think people are being overly ridiculous or gullible 
    	about this take over thing.
    
    	I don't know much about corporate raiding but from what I've
    	been hearing if DEC sold all it's assets today the stock price
    	should be about $69.00 and yet it's only $55.00 today on top of 
    	that DEC has over $2,000,000.000.00 sitting in the bank.
    
    	From what I hear this makes Digital pretty attractive.
    
    					Mike
    					----

re .25

The Fact (or assumption) #3 you talked about in regards to
who would take over if KO retired...

If you remember in last weeks DVN, Ken said "Not everyone
can get promoted." Jack Smith is still around....

In our office, we're taking bets as to whether it will be
Don Zereski or Jack Smith for new President.

clc

The process by which one company acquires another is -- in principle at least --
quite simple. The inactivity around our stock in the last week was a pretty sure
sign that the Mitsubishi rumour was false.

A publicly owned company is actually owned by its shareholders - that's why they
are called share-holders. Thus for one company to acquire another, it must
puchase the target from the people who own it. In other words, to acquire
Digital, you must buy all of the shares in it. You will not be able to get the
shares at the market price. If you're interested, we shareholders would like to
sell at premium - that's if we want to sell to you at all. If we think our
investment is safer without you we may choose not to accept the offer. In
practice this process is managed by the board of directors (our elected
representatives) who will recommend rejection of the bid, or acceptance of a
price negotiated with the aspiring purchaser. A takeover therefore cannot occur
without the agreement of both the BOD and the shareholders.

In a hostile takeover, the acquirer tries to get around the intransigent BOD by
buying a sufficient amount of stock to call extraordinary general meetings and
replace intransigent directors with their own people. Other matters can be
placed on the agenda and voted.

In the late '80s Digital altered its byelaws to protect itself from hostile
takeover. The rules are extremely complex but they basically achieve two things:
(1) Directors can't be summarily replaced and the board can't be "packed" by
a majority shareholder; (2) In the event of a hostile acquisition of stock, the
BOD has the right to massively dilute the stockholders' equity making a takeover
prohibitively expensive. This latter is called the "poison pill" defence because
as well as preventing the takeover, it also wrecks the company's financial
structure.

The bottom line here is that if Digital is ever acquired or merged (never say
never), it will be a "friendly" affair. As soon as negotiations between boards
commence, the stock price will begin to rise to reflect the value signified by
the acquirer's desire to purchase and driven by investor's desire to profit from
the deal.

No indication of this occurred last week. That's not to say it will never
happen. Digital is probably a good acquisition target.

	Richard.

Re 27:
> In our office, we're taking bets as to whether it will be
> Don Zereski or Jack Smith for new President.

You guys labor under the completely understandable illusion that
Digital is still a US company. In fact, over 50% of both revenue and
profit come from outside the US. The president responsible for most of
this is Pier-Carlo Falotti -- a most capable and talented manager if
ever there was one. He's got my vote.

I'd like to vote with you Mike.

However, Pier-Carlo may have a problem with all the extra employees in the US 
he inherits. I believe he acheived 55% of the total profits, with only 38% 
of the total employess 2 years ago!

Maybe we could start building small pickup trucks in our dormant manufacturing 
plants, manned by the vast army of re-skilled "meeting goers"? (Mitsubishi eat 
your heart out!:-)


Brian.

    
    While I agree that Fallotti is a good manager and he would make a good
    president, it won't happen. This IS a US based multinational and
    unless Fallotti is given a visible US-based position ahead of time it
    is unlikely he'll even be considered. Remember as well that he is
    president of a subsidiary. That makes him about equal with Smith and
    Hindle. He's got a shot inside but it's outside politics that may play 
    a role in any successor.
    

    
    
    
    
    Re: .30
    
    My understanding is that the US carries a disproportionate share of
    employees as compared to Europe and GIA due to the large amount of both
    engineering and manufacturing that is done in the US. I don't know any
    hard numbers though.
    
    My point is that the statement in .30 seems to reflect that Pier-Carlo
    made 55% of the company's total profits with a higher profitibility per
    employee (38% of the company's employees). You need to factor in that
    he carries less overhead. I don't wish to disparage the great work
    Europe has done for the company, only cast it in a better light.
    
    I do expect that Pier-Carlo could make a great President. He certainly 
    has a great track record!
    
    Steve

    
    re .28
    
    our stock went up 12 points yesterday, is that a sign?
    
    

    re-1
    Stock went down 2-1/2 pts yesterday
    
    Mike

re.33

>    our stock went up 12 points yesterday, is that a sign?
    
It did? on what stock market?

According to VTX, On 10/01/91 the high was 56 7/8 the low and closing
price was 54 1/4.

- George    

    DEC 54 3/8, change +0 1/8; DJIA 3020.35, change +2.01 at 13:00.
    Report entered at Wed Oct  2 13:10:24 1991.
    
    ...like a herd of turtles...:^)
    
    Mark

    Boy did I screw up, the change I read was the change in dow jones.
    
    Sorry.
    
    

    
    "60 Minutes" had an interesting segment on Japanese firms within
    the US this past weekend (what a coincidence).
    
    The gist of the program stemmed around American managers not getting
    promoted to higher positions, specifically, the top 2 (or 3) levels
    of management ... all who were Japanese.  The "glass ceiling".  

    When "60 Minutes" interviewed a japanese analyst(?) and the question
    'why was this so?' posed to him, he answered (via interpretor) that 
    the American style of management was different from Japanese.  Amer-
    ican top level mgt has the view of 'It's done my way.  If you're
    with me, good.  If not, get out of my way.  Japanese mgt sees itself
    as a silent mgt listening to all inputs, positive and negative, and 
    basing a decision on those inputs.'

    And the american top managers that WERE above the ceiling at one
    point were layed-off, then replaced by a japanese.  Most examples 
    given by 60 Min. were VP positions.

    Whoa.  VP's.  Things are beginning to add up ;*)

    Japanese companies never allow "foreigners" into the top positions
    regardless of their attitudes or philosophies.  Even in subsidiaries
    that are nominally run by "foreigners", the real control is with 
    an obscure finance officer or engineering executive who is Japanese.
    
    The appearance of "consensus" management in Japanese companies is a
    carefully orchestrated illusion.  The ruling management oligarchies
    do not tolerate public dissent nor do they permit any challenges from
    subordinates.
    
    If we became a Japanese subsidiary, things would be very different.
    We could expect very comprehensive strategic planning, methodical
    improvements in tactical execution, and utterly ruthless daily
    operations.  We could also expect the top positions in the company
    to be permanently reserved for Japanese executives.
    
    Don't look for an external savior.

    A friend of ours works for a (steel) company that got bought out by the
    Japanese a few years ago.  When it happened, the company went from a
    small one, doing just one steel plant at a time here in the U.S., to a
    global one, building steel plants all over the world.  For that reason,
    our friend immediately began doing large amounts of international
    travel.  However, other than that, his corporate life didn't change a
    whole lot as a result of the buyout.
    
    However, he has returned from Japan many times, and recounted absolute
    horror stories about how the employees in Japan are treated by the
    company.  We're talking ruthless here, folks.
    
    Of course there's no guarantee that other Japanese companies would make
    the same decision, but his particular company apparently decided to
    preserve something of the culture of the U.S. company when they bought
    it out.
    
    Steve

 -----       AT&T considered Digital, Hewlett        
|C I S|      Packard and Apple 
 -----  
             Source : European Daily Info              Date : 08-OCT-91



     + - + - + - + - + - + - + - + - + - + - + - + - + - + - + - + - + 
     |  Please be advised that the information contained within this | 
     +  report is copyrighted material.  The following policies must + 
     |  be adhered to:                                               | 
     +                                                               + 
     |     -  No reformatting of the data segments                   | 
     +     -  No external distribution                               + 
     |     -  Internal use only in accordance with vendor agreements | 
     + - + - + - + - + - + - + - + - + - + - + - + - + - + - + - + - + 


Geneva, Switzerland, Oct 08/European Daily Info/

EUROPEAN DAILY -- Before launching its hostile bid for NCR, AT&T had detailed
analysis of other potential targets, including, Digital, HP and Apple,
according to Richard S. Bodman, a chief strategist at AT&T.  Although looking
for properties in "areas of advanced (communications) services..." he said
that AT&T is currently planning no takeovers on the scale of the NCR
acquisition.

SJ/E. English. 1991-10-08. Size: 3 c

Ahhh Gi'day...�

    Felotti isn't  in charge of a bottom line subsidiary, he's in charge of
    the people IN CHARGE of subsidiaries, although maybe DEC Europe is some
    form of holding subsidiary.

    You forget  that  Engineering  and  manufacturing  costs  are  payed by
    Margins (read corporate taxes), that go back to Area and US.  These are
    off  the earned revenue, you have to deliver a service/product and make
    a profit AFTER you pay it.